Dream Hoarders | Richard V. Reeves

Summary of: Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It
By: Richard V. Reeves

Introduction

In the book ‘Dream Hoarders,’ author Richard V. Reeves takes a critical look at America’s widening economic gap between the upper middle class, which constitutes the top 20% of the income distribution, and the remaining 80% of the population. Reeves argues that the top quintile has successfully rigged the competition to maintain and protect its status, passing it on to their descendants. He sheds light on opportunity hoarding, the disproportionate growth of wealth among the upper middle class, and how this results in exclusionary tactics that limit access to quality education, healthcare, and other necessities for the majority. The book further explores various initiatives that can help bridge this gap and provide a more equitable distribution of opportunities.

Overlooked Wealth Gap

The economic inequality discussion in America is incomplete. While experts concentrate on the richest 1%, another more crucial concern of the disparity between the upper middle class and the remaining 80% of the population is often neglected. The wealth of the top quintile is spiraling while their status remains untouched through competition and inherited by their descendants.

The Illusion of a Classless Society

The American dream promises that anyone who works hard can rise in the economic hierarchy, but in reality, a rigid class system exists in the US. Despite the lack of formal mechanisms of class structure, the upper middle class has found effective ways to maintain their status and pass it on to future generations. The income gap between the top 20% and the rest of the population has widened, with the upper middle class enjoying a considerable increase in income. The top quintile now holds more than 87% of the nation’s wealth, with over 50% belonging to the upper middle class. These results show that the upper middle class does not win by being better, but by rigging the competition. In conclusion, the US’s implicit promise of upward mobility is an illusion that hides the reality of a hierarchical class system that is becoming more entrenched every day.

The Reality of Opportunity Hoarding in America

The American dream is rooted in the idea of merit – where an individual’s skills and knowledge determine their success, irrespective of their birth. However, in reality, the top quintile of society enjoys more opportunities to acquire skills that the market values, resulting in a growing class divide between the upper middle class and the rest. The upper middle class is “hoarding” opportunities, including those related to higher education. While this is often driven by parents’ aspirations for their children, the result is greater inequality. Children from the upper middle class receive exclusive access to quality education, personal enrichment, and academic tutors, giving them a significant advantage in university admissions. This deprives lower-income students of a level playing field and reinforces the existing social and economic hierarchy.

Unfair Advantages for Upper-Middle-Class Children

The upper-middle-class engages in hoarding behaviors that give their children an unfair advantage in life. These schemes include exclusionary zoning, legacy admissions programs in colleges, and unpaid internships. Exclusionary zoning blocks the construction of homes that could accommodate lower-income families, creating barriers around upper-middle-class neighborhoods. Legacy admissions programs offer preferential consideration for the sons and daughters of alumni. Top colleges in the US practice this seemingly un-American form of inherited entitlement. The acceptance rate for legacies at Harvard, Yale, Princeton, Georgetown and Stanford is two to three times the overall admission rate. Internships, which have exploded in popularity with employers, provide a massive boost to young members of the upper middle class in their transition from college to the workplace. Employers rank internships as the primary factor in a hiring decision. Unfortunately, more than half of internships pay no salaries, which means that only those young people whose parents can subsidize them can take advantage of them. These hoarding behaviors distort market competition in favor of their kids, leaving others at a disadvantage.

Social Mobility and the Top 20%

In the pursuit of social mobility, the fact remains that for those in lower-income quintiles to move up to the top 20%, those already in the top 20% must fall out. The limited capacity of the top 20% makes the fall precipitous due to the chasm between it and the 80%. The vicious cycle that ensues is reinforced by those in the top quintile using their advantage to maintain their position through zoning laws, preferential college admissions practices, professional licensing requirements, among others.

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